The Two Alternative Approaches to Capital Budgeting Are the

question 4

Multiple Choice

The two alternative approaches to capital budgeting are the

• A) weighted average cost of capital and flow-to-equity.
• B) discounted cash flow and the flow-to-equity.
• C) weighted average cost of capital and net income.
• D) discounted cash flow and net income.

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Definitions:

Credit Terms

Conditions under which a seller extends credit to a buyer, including payment deadlines and interest rates.

Discount Period

The time frame during which a payment can be made at a reduced rate before the full amount becomes due.

Annual Interest

The total amount of interest payable or receivable over one year, depending on whether the context is savings, investment, or a loan.

Credit

An accounting entry that increases liabilities and equity, or decreases an asset or expense account, representing the opposite of a debit.